HollySys Automation Technologies Ltd. (NASDAQ: HOLI) (“HollySys” or the “Company”), a leading provider of automation and control technologies and applications in China, today provided an update on the litigation filed by Mr. Baiqing Shao and Ace Lead Profits Limited (“Ace Lead”) against the Company in the Eastern Caribbean Supreme Court, Territory of the British Virgin Islands (the “Court”).
As previously disclosed, on January 7, 2021, the Company adopted amendments (the “2021 Amendments”) to the Amended and Restated Memorandum and Articles of Association of the Company (the “2021 M&AA”). Mr. Baiqing Shao and Ace Lead (the “Claimants”) initiated proceedings against the Company in the Court on February 4, 2021 seeking to prevent the Company from enforcing the 2021 Amendments (the “Claim”).
On September 22, 2021, the Court handed down a judgment rejecting the Claim. The Court’s decision means that the 2021 Amendments were validly adopted, the 2021 M&AA are currently effective, and the Company can take steps in reliance on the 2021 M&AA.
In denying the Claim, the Court found that “the [Company’s] directors all acted for proper motives and that the amendments were not made in breach of their fiduciary duties to Hollysys“. The decision of the Court may be appealed within 42 days of the date of the ruling.
The Court ordered the Claimants to pay the Company’s costs of the litigation, which the Company will enforce, including by seeking satisfaction against the shares in the Company held by Mr. Baiqing Shao.
The Court decision, dated September 22, 2021, is expected to become publicly available as part of claim BVIHC (COM) 2021/0015 in the Eastern Caribbean Supreme Court, Territory of the British Virgin Islands and will be posted on the Company’s website.